88R11060 CJC-F     By: Birdwell S.B. No. 1420       A BILL TO BE ENTITLED   AN ACT   relating to municipal and county hotel occupancy taxes.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Sections 351.001(2), (6), (8), and (10), Tax   Code, are amended to read as follows:                (2)  "Convention center facilities" or "convention   center complex" means facilities that are primarily used to host   conventions and meetings.  The term means civic centers, civic   center buildings, auditoriums, exhibition halls, and coliseums   that are owned by the municipality or other governmental entity or   that are managed in whole or part by the municipality. In a   municipality with a population of 1.5 million or more, "convention   center facilities" or "convention center complex" means civic   centers, civic center buildings, auditoriums, exhibition halls,   and coliseums that are owned by the municipality or other   governmental entity or that are managed in part by the   municipality, hotels owned by the municipality or a nonprofit   municipally sponsored local government corporation created under   Chapter 431, Transportation Code, within 1,000 feet of a convention   center owned by the municipality, or a historic hotel owned by the   municipality or a nonprofit municipally sponsored local government   corporation created under Chapter 431, Transportation Code, within   one mile of a convention center owned by the municipality. The term   includes parking areas or facilities that are for the parking or   storage of conveyances and that are located at or within 1,500 feet   of the [in the vicinity of other] convention center facilities. The   term also includes a hotel owned by or located on land that is owned   by an eligible central municipality or by a nonprofit corporation   acting on behalf of an eligible central municipality and that is   located within 1,000 feet of a convention center facility owned by   the municipality. The term also includes a hotel that is owned in   part by an eligible central municipality described by Subdivision   (7)(D) and that is located within 1,000 feet of a convention center   facility.  For purposes of this subdivision, "meetings" means   gatherings of people that enhance and promote tourism and the   convention and hotel industry.                (6)  "Tourist" means an individual who:                      (A)  travels at least 50 miles from the   individual's residence to a different municipality, county, state,   or country for business, pleasure, recreation, education, or   culture;                      (B)  attends a meeting at a hotel or an event at a   hotel; or                      (C)  spends the night at a hotel.                (8)  "Visitor information center" or "tourism   information center" means a building or a portion of a building that   is primarily used to distribute or disseminate information to   tourists.                (10)  "Multiuse facility" means a facility at which the   majority of events attract tourists who substantially increase   economic activity at hotels in the municipality in which the   facility is located. ["Revenue" includes any interest derived from   the revenue.]          SECTION 2.  Section 351.009, Tax Code, is amended to read as   follows:          Sec. 351.009.  ANNUAL REPORT TO COMPTROLLER.  (a)  Not   later than March 1 [February 20] of each year, a municipality that   imposes the tax authorized by this chapter shall report to the   comptroller:                (1)  the rate of:                      (A)  the tax imposed by the municipality under   this chapter; and                      (B)  if applicable, the tax imposed by the   municipality under Subchapter H, Chapter 334, Local Government   Code;                (2)  the amount of revenue collected during the   municipality's preceding fiscal year from:                      (A)  the tax imposed by the municipality under   this chapter; and                      (B)  if applicable, the tax imposed by the   municipality under Subchapter H, Chapter 334, Local Government   Code; [and]                (3)  the amount and percentage of the revenue described   by Subdivision (2)(A) allocated by the municipality to each use   authorized by this chapter for which the municipality used the   revenue [described by Sections 351.101(a)(1), (2), (3), (4), (5),   and (9)] during the municipality's preceding fiscal year, stated   separately as an amount and percentage for each applicable use; and                (4)  the total amount of any revenue described by   Subdivision (2)(A) collected in any preceding fiscal year of the   municipality that has not been spent by the municipality and the   amount of that unexpended revenue, if any, that is spent in the   municipality's budget for the fiscal year in which the report is due   [of those subdivisions].          (b)  The municipality must make the report required by this   section by[:                [(1)]  submitting the report to the comptroller on a   form prescribed by the comptroller[; or                [(2)  providing the comptroller a direct link to, or a   clear statement describing the location of, the information   required to be reported that is posted on the Internet website of   the municipality].          (c)  The [Subject to Subsection (b)(2), the] comptroller   shall prescribe the form a municipality must use for the report   required to be submitted under this section.          (d)  A municipality that is required to make a report to the   comptroller under this section may use a portion of the revenue   described by Subsection (a)(2)(A) for the costs incurred by the   municipality in making and submitting the report. The amount of   revenue a municipality may use each year for the purpose authorized   by this subsection may not exceed:                (1)  $1,000 if the municipality has a population of   less than 10,000; or                (2)  $2,500 if the municipality has a population of   10,000 or more.          (e)  The comptroller may adopt rules necessary to administer   this section.          SECTION 3.  Section 351.101, Tax Code, is amended by adding   Subsection (f-1) to read as follows:          (f-1)  A municipality may not use municipal hotel occupancy   tax revenue for a visitor information center under Subsection   (a)(1) to acquire a site for, construct, improve, enlarge, equip,   repair, staff, operate, or maintain any part of a building or   facility that is not exclusively used to distribute or disseminate   tourism-related information to tourists.          SECTION 4.  Section 351.1021(a)(3), Tax Code, is amended to   read as follows:                (3)  "Multipurpose convention center facility project"   means a project that consists of a hotel owned by an eligible   municipality or another person and a multipurpose convention center   facility, the nearest exterior wall of which is located not more   than 2,500 feet from the nearest exterior wall of the hotel.  A   multipurpose convention center facility project may include:                      (A)  each new or existing business located in the   municipality, regardless of who owns the business or the property   on which the business is located, the nearest exterior wall of which   is located not more than 2,500 feet from the nearest exterior wall   of the multipurpose convention center facility or the hotel that is   part of the project;                      (B)  a parking shuttle or transportation system   used primarily by tourists; and                      (C)  any parking area or structure located in the   municipality, regardless of who owns the area or structure or the   property on which the area or structure is located, the nearest   property line of which is located not more than two miles from the   nearest exterior wall of the multipurpose convention center   facility.          SECTION 5.  Sections 351.103(a), (b), and (c), Tax Code, are   amended to read as follows:          (a)  A municipality [At least 50 percent of the hotel   occupancy tax revenue collected by a municipality with a population   of 200,000 or greater must be allocated for the purposes provided by   Section 351.101(a)(3).  For municipalities] with a population of   less than 200,000 shall allocate [, allocations] for the purposes   provided by Section 351.101(a)(3) an amount of hotel occupancy tax   revenue collected by the municipality that is [are as follows:                [(1)  if the tax rate in a municipality is not more than   three percent of the cost paid for a room, not less than the amount   of revenue received by the municipality from the tax at a rate of   one-half of one percent of the cost of the room; or                [(2)  if the tax in a municipality exceeds three   percent of the cost of a room,] not less than the amount of revenue   received by the municipality from the tax at a rate of one percent   of the cost of a room.  [This subsection does not apply to a   municipality, regardless of population, that before October 1,   1989, adopted an ordinance providing for the allocation of an   amount in excess of 50 percent of the hotel occupancy tax revenue   collected by the municipality for one or more specific purposes   provided by Section 351.101(a)(1) until the ordinance is repealed   or expires or until the revenue is no longer used for those specific   purposes in an amount in excess of 50 percent of the tax revenue.]          (b)  A [Subsection (a) does not apply to a municipality in a   fiscal year of the municipality if the total amount of hotel   occupancy tax collected by the municipality in the most recent   calendar year that ends at least 90 days before the date the fiscal   year begins exceeds $2 million.  A municipality excepted from the   application of Subsection (a) by this subsection shall allocate   hotel occupancy tax revenue by ordinance, consistent with the other   limitations of this section.  The portion of the tax revenue   allocated by a] municipality with a population of more than 1.6   million shall allocate at least 23 percent of the hotel occupancy   tax revenue collected by the municipality for the purposes provided   by Section 351.101(a)(3) [may not be less than 23 percent], except   that the allocation is subject to and may not impair the authority   of the municipality to:                (1)  pledge all or any portion of that tax revenue to   the payment of bonds as provided by Section 351.102(a) or bonds   issued to refund bonds secured by that pledge; or                (2)  spend all or any portion of that tax revenue for   the payment of operation and maintenance expenses of convention   center facilities.          (c)  Not more than 15 percent of the hotel occupancy tax   revenue collected by a municipality, other than a municipality   having a population of more than 1.6 million, or the amount of tax   received by the municipality at the rate of one percent of the cost   of a room, whichever is greater, may be used for the purposes   provided by Section 351.101(a)(4).  Not more than 19.30 percent of   the hotel occupancy tax revenue collected by a municipality having   a population of more than 1.6 million, or the amount of tax received   by the municipality at the rate of one percent of the cost of a room,   whichever is greater, may be used for the purposes provided by   Section 351.101(a)(4).  Not more than 15 percent of the hotel   occupancy tax revenue collected by a municipality [having a   population of more than 125,000] may be used for the purposes   provided by Section 351.101(a)(5). A municipality that before   January 1, 2023, adopted in accordance with state law an ordinance   providing for the allocation of an amount in excess of 15 percent of   the hotel occupancy tax revenue collected by the municipality for   one or more of the specific purposes provided by Section   351.101(a)(5) may allocate tax revenue as provided by that   ordinance until the ordinance is repealed or expires or until the   revenue is no longer used for those specific purposes.          SECTION 6.  Section 351.110(c), Tax Code, is amended to read   as follows:          (c)  This section does not authorize the use of revenue   derived from the tax imposed under this chapter for a   transportation system that serves the general public other than for   a system [that transports tourists as] described by Subsection (a)   that is primarily used by tourists.          SECTION 7.  Subchapter C, Chapter 351, Tax Code, is amended   by adding Sections 351.161, 351.162, and 351.163 to read as   follows:          Sec. 351.161.  APPLICATION OF OTHER LAW. This subchapter   may not be construed as authorizing the taking of private property   for economic development purposes in a manner inconsistent with the   requirements of Section 17, Article I, Texas Constitution, or   Section 2206.001, Government Code.          Sec. 351.162.  RECAPTURE OF LOST STATE TAX REVENUE FROM   CERTAIN MUNICIPALITIES. (a) This section applies only to a   municipality to which this subchapter first applied on or after   January 1, 2023.          (b)  On the 20th anniversary of the date a hotel designated   as a qualified hotel by a municipality to which this section applies   is open for initial occupancy, the comptroller shall determine:                (1)  the total amount of state tax revenue received   under Section 351.156 by the municipality from the qualified   project of which the qualified hotel was a part during the period   for which the municipality was entitled to receive that revenue;   and                (2)  the total amount of state tax revenue described by   Section 351.156 received by the state during the period beginning   on the 10th anniversary of the date the qualified hotel opened for   initial occupancy and ending on the 20th anniversary of that date   from the same sources from which the municipality received revenue   under Section 351.156.          (c)  If the amount determined under Subsection (b)(1)   exceeds the amount determined under Subsection (b)(2), the   municipality shall remit to the comptroller the municipal hotel   occupancy tax revenue received by the municipality from the   qualified hotel until the amount remitted to the comptroller equals   the difference between the amount described by Subsection (b)(1)   and the amount described by Subsection (b)(2).          (d)  The comptroller shall deposit revenue received under   this section in the manner prescribed by Section 156.251.          Sec. 351.163.  REPORT ON QUALIFIED PROJECTS. (a) Not later   than December 1 of each even-numbered year, the comptroller shall   prepare a report on the status of each qualified project.          (b)  The report must include, for each qualified project:                (1)  the location and a description of the project,   including the current status of the project;                (2)  the number of qualified hotels and qualified   convention center facilities associated with the project;                (3)  the total amount of tax revenue received by a   municipality under Section 351.156 and, if applicable, Section   351.157 as a result of the project; and                (4)  the amount of new state tax revenue generated by   the project that has been received by the state.          (c)  The comptroller may include in the report any additional   information the comptroller determines is necessary to evaluate the   effect of each qualified project on the economy of this state.          (d)  The comptroller shall:                (1)  post a copy of the report on the comptroller's   Internet website; and                (2)  provide a copy of the report to the lieutenant   governor, speaker of the house of representatives, and each other   member of the legislature.          SECTION 8.  Section 352.009, Tax Code, is amended to read as   follows:          Sec. 352.009.  ANNUAL REPORT TO COMPTROLLER.  (a)  Not   later than March 1 [February 20] of each year, a county that imposes   the tax authorized by this chapter shall report to the comptroller:                (1)  the rate of:                      (A)  the tax imposed by the county under this   chapter; and                      (B)  if applicable, the tax imposed by the county   under Subchapter H, Chapter 334, Local Government Code; [and]                (2)  the amount of revenue collected during the   county's preceding fiscal year from:                      (A)  the tax imposed by the county under this   chapter; and                      (B)  if applicable, the tax imposed by the county   under Subchapter H, Chapter 334, Local Government Code;                (3)  the amount and percentage of the revenue described   by Subdivision (2)(A) allocated by the county to each use   authorized by this chapter for which the county used the revenue   during the county's preceding fiscal year, stated separately as an   amount and percentage for each applicable use; and                (4)  the total amount of any revenue described by   Subdivision (2)(A) collected in any preceding fiscal year of the   county that has not been spent by the county and the amount of that   unexpended revenue, if any, that is spent in the county's budget for   the fiscal year in which the report is due.          (b)  The county must make the report required by this section   by[:                [(1)]  submitting the report to the comptroller on a   form prescribed by the comptroller[; or                [(2)  providing the comptroller a direct link to, or a   clear statement describing the location of, the information   required to be reported that is posted on the Internet website of   the county].          (c)  The [Subject to Subsection (b)(2), the] comptroller   shall prescribe the form a county must use for the report required   to be submitted under this section.          (d)  A county that is required to make a report to the   comptroller under this section may use a portion of the revenue   described by Subsection (a)(2)(A) for the costs incurred by the   county in making and submitting the report. The amount of revenue a   county may use each year for the purpose authorized by this   subsection may not exceed:                (1)  $1,000 if the county has a population of less than   10,000; or                (2)  $2,500 if the county has a population of 10,000 or   more.            (e)  The comptroller may adopt rules necessary to administer   this section.          SECTION 9.  The following provisions of the Tax Code are   repealed:                (1)  Sections 351.103(d) and (e); and                (2)  Section 351.110(b).          SECTION 10.  The comptroller of public accounts shall   prescribe the form of the report required under Sections 351.009   and 352.009, Tax Code, as amended by this Act, not later than   January 1, 2024.  A municipality or county required to make a report   under those sections must submit the 2024 report using the form   prescribed by the comptroller under this section.          SECTION 11.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.     If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2023.